INFORMATION ECONOMY REPORT 2013 The Cloud Economy and Developing Countries

1. INFORMATION ECONOMY REPORT 2013The Cloud Economy and Developing Countries TorbjörnFredriksson (torbjorn.fredriksson@unctad.org) Chief, ICT Analysis Section, UNCTAD 28 April 2014, Tunis, Second SG13 Regional ITU Workshop for Africa on "Future Networks: Cloud Computing, Energy Saving, Security, and Virtualization“

2. Introduction to UNCTAD • United Nations Conference on Trade and Development • Founded in 1964 • Overallaim: to promote the development-friendly integration of developing countries into the world economy. • Focus areas: • International trade and commodities • Investment and enterprisedevelopment • Commodities • Technology and logistics • Africa and the least developed countries ICTs

3. UNCTAD and ICTCollaboration with ITU and other UN agencies • UN Group on the Information Society (UNGIS) • Chairs and vice chairs: ITU, UNCTAD, UNESCO, UNDP and UNDESA • 30 members • Co-organizer of the annual WSIS Forum/WSIS+10 HL Event • Lead facilitator of Action Line C7 on E-business • High Level Event: 10-13 June 2014 • Secretariat of the CSTD • Follow-up to the WSIS – next session 12-16 May 2014 • Partnership on Measuring ICT for Development • Member of itsSteeringCommittee • 13 members

4. IER2013 The Cloud Economy and Developing Countries • Early stage but of growing relevance • Need for objective analysis • Lack of evidence • Valuable input from ITU Study Group, Jamil Chawki • First cloudanalysis by UN secretariat

5. Whatis Cloud Computing? • A way of delivering applications, services or content remotely, rather than requiring users to hold them on their own servers, computers or other devices. • Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. (NIST, 2011) • Webmail, online social networks and file-sharing among the most popular applications on the Internet, also in the developing world. • Metaphor of the "cloud" misleading – cloud is enabled by physical hardware, networks, storage, services and interfaces

6. The Cloud Economy – a FrameworkKey stakeholders and marketrelationships Source: UNCTAD.

7. Whathas enabledthe Cloud? • Processing power • Intel’scurrent 22 nanometre CPU is 4,000 times faster, uses 0.02 per cent of the energy and costs 1/50,000 of its first CPU released in 1971 • Digital storage • The first IBM PC (1981) cost $3,000; accepted diskettes of 160kb • By 2010, a hard disk for $600 could store all music everrecorded • Transmission speed • Dial-up connection in 1993: 56kbps • As of 2013, some consumer broadband packages 2Gbps – some 36,000 times faster

8. Cloud computingcharacteristics and models Source: UNCTAD, adaptedfrom NIST 2011.

9. Cloud revenue estimates and forecasts vary2010 and 2015, $ billions Thesenumbers do not includeadvertising revenue! Source: Berry and Reisman, 2012: 6.

10. Cloud-relatedtraffic on the InternetMainly in developed countries but growingfast Source: Cisco Analysis.

11. Top Global Cloud Companiesby estimatednumber of servers 2012 Source: UNCTAD, based on information from company reports and other sources.

12. Pros and cons with the Cloud Source: UNCTAD.

13. The Broadband ChallengeGap to LDCskeepwidening Fixedbroadbandsubscriptions per 100 people, 2007-2012 Active mobile broadbandsubscriptions per 100 people, 2010-2012 Africa (2012): 1 Africa (2012): 6 Source: ITU.

14. The Data Centre and Server Divides Source: DataCentreMap and World Bank.

15. The Internet Exchange Point (IXP) DivideDistribution (%) of IXPs by region, June 2013 • Issue recognized by African Union Commission through the African Internet Exchange System project, funded by the EU-Africa Infrastructure Trust Fund and the Government of Luxembourg. • Studies of IXPs in Kenya and Nigeria show significant reduction in latency Source: Packet Clearing House.

16. “Quality of Service” requirementsvary Latency and upload speeds main bottlenecks for developing countries. Source: Cisco Analysis.

17. Broadband Quality of Service – Africa Source: UNCTAD, based on Cisco Analysis 2012.

18. Regulatory issues • Cloud data can become subject to multiple jurisdictions • The transfer of data out of the user’s jurisdiction may raise issues of control, effective oversight and audit. • For some regulated sectors, such as financial services, cloud-related transfers and storage outside the jurisdiction may breach national rules. • Key legal areas to address: • Data protection • Privacy • Cybercrime Source: UNCTAD.

19. Standardization issues • Cloud computing new and evolving area • Cloud service providers offer different approaches, based on different business models, capabilities and customer profiles • Standards critical to achieve interoperability, spur competition and enable effective use of multiple providers • Standard-setting activities on cloud mainly in and by developed countries – risk that specific needs and requirements of developing countries are not adequately addressed Source: UNCTAD.

20. Policy recommendations • Welcome the cloud economy but tread carefully • Assess “cloud readiness“, define national strategy with relevant partners • Consider all cloud relevant configurations • Enhance access to reliable, affordable broadband • Address relevant laws and regulations • Recognize supply side opportunities of the cloud economy • Consider Government's own use of the cloud • Engage in standardisation forums • Seek support from Development Partners

21. Supply-sidecloudopportunities in developing countries • Data centre services • Local and foreign providers • Government-owned centres • Provision of cloud services for local customers • Infrastructure as a Service (IaaS) –first step in low-income countries • Platform as a Service (PaaS) • Software as a Service (SaaS) • Cloud aggregation, system integration, brokerage and related services • Leverageexperience with national business, legal and communications environment.

22. Data centre developments in Africasomeexamples • Communications providers • Galaxy Backbone and Globacom(Nigeria) • Safaricom (Kenya) • Governmentprojects • Kenya: data centre capacity for its own use as well as for public access to reduce costs for businesses and organizations that need to host data in-country. • Ghana: three data centres that will host data from all government ministries, departments and agencies.

23. Cloud services in Africa– someexamples • MTN (South Africa) launched cloud service business packages for SMEs in Ghana and Nigeria in December 2012 • Vodacom, a South African telecommunication operator has partnered with Novell, an IT provider, to offer cloud services • PamojaCloud Services, owned by SEACOM (South Africa) targets demand for IT-as-a-Service from SMEs in Africa • Cloud aggregation services companies in Nigeria: Computer Warehouse, Resourcery, City Business Computers and Computer Information System • Mothers-2-mothers (M2M),a South African NGO, combines the cloud with database technology and mobile services to reduce the incidence of HIV/AIDS transmission from mothers to children

24. Policy recommendations • Welcome the cloud economy but tread carefully • Assess “cloud readiness“ and define national cloud strategy with relevant stakeholders • Consider all cloud configurations: public/private/hybrid clouds implemented nationally, regionally or globally • Enhance access to reliable, affordable broadband • Address laws and regulations concerning privacy, data protection and cybercrime • Recognize supply side opportunities of the cloud economy • Consider Government's own use of the cloud • Seek support from Development Partners

25. THE INFORMATION ECONOMY REPORT 2013 canbedownloaded free of charge at unctad.org/ier

26. Getting to the cloud Source: UNCTAD.

27. Areas and bodies for cloud computing standardisation Source: Standardisation activities for cloud computing, NTT